For crypto miners turned AI stars, the real test is about to come

• Former crypto miners are pivoting to AI, leveraging legacy power contracts to land deals with Big Tech.
• These firms must deliver complex, capital-intensive projects on tight timelines.
• Falling borrowing costs show lenders are betting these firms will be key to scaling infrastructure.

They're the biggest beneficiaries of the artificial intelligence race you've never heard of.

While the largest tech firms have unveiled unprecedented spending for AI infrastructure, and leading language developers Anthropic and OpenAI close in on blockbuster IPOs, a group of former crypto-mining companies have quietly become power players amid the soaring demand for data centers.

With names like TeraWulf, Applied Digital, Iren, Core Scientific, and Cipher Digital, the companies make up for their short track records with access to an even more essential ingredient for success: utility power contracts that allow them to quickly energize electricity-hungry AI computing facilities.

That legacy wattage from their cryptomining days has drawn in big-name customers in need of high-performance computing space and has allowed several of these companies to complete a remarkable pivot from the faltering crypto market to the boundless opportunities of the AI boom.

"They have been more successful than anyone — including themselves — could have anticipated," said Nick Giles, a senior research analyst at B. Riley Securities who covers several of the firms, most of which are public.

Giles and his team calculated that 11 of the leading former crypto-mining firms had grown from a cumulative market capitalization of roughly $2.1 billion in late 2022 to roughly $48.5 billion today — which he said was a "winning scenario" for investors.

"It's a mindblowing jump in valuation," said Brian Dobson, a managing director at Clear Street who heads the firm's technology equity research.

To justify the stock market's rapid revaluation, these companies now need to deliver on building state-of-the-art AI facilities for some of the world's largest and most demanding tech firms. The projects are far more expensive and complex than the mining operations they are experienced with, and depend on successfully connecting to power grids that are increasingly strained by the data center boom. If all goes according to plan, the industry will cumulatively consume enough energy in the coming years to light up multiple large American cities.

Missing deadlines, however, could trigger costly financial penalties that could topple the economics of multibillion-dollar projects.

Becoming AI power players

Similar in scale to AI data centers, cryptomining facilities, which use heavy computing to solve algorithms that allow them to mint cryptocurrency, can have power footprints of hundreds of megawatts. Top-tier data centers, however, have far smaller tolerances for outages and need expensive equipment to prevent them, including backup generators and vast cooling systems to absorb the tremendous waste heat of intensive AI computing.

"The theme of 2025 was that everyone would get out and get a contract with a major customer," Dobson said. "2026 is the year of expanding on those contracts and, more importantly, executing on those deals."

Among the unknowns is whether delays or operational difficulties could initiate penalties or even allow customers to walk away from project commitments. Either scenario could be financially damaging given the immense costs involved in AI data center development, which routinely runs into the many billions of dollars for sizable campuses. Most of the former crypto-mining companies are public, but transparency into the details of their customer contracts varies.

"There will be delays, there always is in construction," Dobson said.

Late last year, for instance, the CEO of CoreWeave, a former crypto mining company that has transitioned into a $40 billion AI cloud provider, disclosed on an earnings call that it was "affected by temporary delays related to a third-party data center developer, who is behind schedule" on construction. The CEO, Michael Intrator, said that the data center building boom, broadly, was "just overwhelming the supply chains." The company's stock fell 10% at the time based on the news.

Equity analysts at Northland Securities reported that the delayed partner was likely Core Scientific. In a subsequent earnings call in February, Intrator said the delays for the facilities had been resolved.

High-stakes and limited transparency

So far, lucrative deals have vastly outnumbered any signs of a setback for the industry.

Applied Digital and Cipher Digital have amassed the largest data center portfolios of the former crypto miners, with 5 gigawatts and 4.1 gigawatts, respectively, of active capacity and planned projects. To give an idea of how much energy that is, New York City requires about 10 gigawatts of power in the summer.

The companies have both hinted at big upcoming deals, with Cipher Digital disclosing it has just reached a 15-year agreement with an unnamed "investment-grade hyperscale tenant" and Applied Digital stating that it is "in advanced discussion on three sites and 900 megawatts."

The companies, however, have offered few disclosures into what might happen if there are stumbles during execution.

Last summer, TeraWulf was one of the few to spell out the penalties it could face after it announced a deal for Fluidstack and Google to expand to 360 megawatts at a center campus it is building in Western New York. In a subsequent public filing with the Securities and Exchange Commission, the Maryland-based company revealed that if the project is delayed by 180 days or more, "Fluidstack will have the right to terminate the applicable" lease and that an agreement for Google to guarantee $3.2 billion of rent would potentially be voided.

Losing the Google backstop could substantially increase borrowing or refinancing costs for the project known as Lake Mariner.

"180 days sounds like a comfortable amount of time, but it's not that long when we're talking about mega-construction," B-Riley analyst Giles said.

Giles said TeraWulf was one of the most transparent of the former crypto miners and that few others had laid out such details in their contracts. He said he was confident in TeraWulf's ability to deliver on its plans and that the company, whose shares traded at less than a dollar in 2023 and are now around $15, is one of his top picks to excel.

For now, however, the lending market has signaled growing confidence in the rising fortunes of former crypto miners, extending debt to the companies at increasingly favorable rates. Cipher Digital, for instance, borrowed $1.4 billion in November 2025 for a Texas data center it's building for Fluidstack and Google at 7.1%, according to a research report from Northland Securities. In February, it received a 6.1% rate for $2 billion it borrowed to fund another Texas facility it's building for Amazon.

Applied Digital, meanwhile, borrowed $2.15 billion at 6.8% in March for a data center it's building for Oracle. That was less than the 9.3% rate it received for a $2.35 billion loan in November 2025 for another facility it's developing for CoreWeave, which has a lower credit rating than Oracle.

There's also growing sentiment that, even if the former crypto-mining firms are late delivering facilities, their clientele will be forgiving amid a nationwide scarcity of AI computing power.

"While in some instances there have been delays on delivering some infrastructure, the customers have not changed any of the terms," said Paul Golding, a senior digital infrastructure analyst at Macquarie. "The scarcity of power and infrastructure has created a dynamic where to go somewhere else would take far longer potentially than just waiting for the incremental catch up."